A Loved One Has Passed Away. What Practical Steps Should You Take Next?

When someone close to you passes away, there is obviously a lot to process emotionally. Unfortunately, there can also be a surprisingly long list of practical things that suddenly need attention. One of the questions I frequently get is: “Where do I even start?”

If you are the successor trustee, executor, administrator of the estate, or simply the person trying to help get things organized, you don't necessarily need to tackle everything at once. But there are a few important steps that are worth addressing early, particularly when your loved one owned a home or other real estate. Here are some practical places to start.

1. Locate the Will, Trust, and Other Important Documents

One of the first practical steps I recommend after a loved one has passed away is trying to locate any documents relating to their final wishes. Look for a Will, Trust, amendments to the Trust, property deeds, insurance policies, bank and investment statements, tax returns, and other financial records. If there is a Trust, determine who has been named as the successor trustee. That is generally the person who assumes responsibility for managing the Trust and its assets after the original trustee passes away. If you're unsure what a document means or what authority you have, this is a good time to speak with an estate or probate attorney.

2. Obtain Multiple Copies of the Death Certificate

You'll likely need certified copies of the death certificate for a variety of purposes, including dealing with financial institutions, insurance companies, government agencies, and potentially real estate. Rather than requesting a single copy and discovering later that you need several more, it can be helpful to obtain multiple certified copies at the outset. Trying to obtain more certified copies of the death certificate later can be difficult and more expensive than just getting multiple copies up front. And a color copy of a certified copy is not going to be an acceptable substitute.

3. Make Sure the Home Is Insured

If your loved one owned real estate, this is one item I would not put off. I cannot emphasize enough how critically important this is. Confirm that there is an active homeowners insurance policy and determine what the insurance company requires now that the owner has passed away or the property may be vacant. Why is this so important? A house may be one of the estate's most valuable assets. If a pipe breaks, someone breaks into the property, a fire occurs, or there is another major loss while the property is uninsured, the financial consequences to the estate could be enormous. And unfortunately, you generally can't buy insurance retroactively after something has already happened.

4. Secure and Check on the Property

If no one is living in the home, make sure someone is regularly checking on it.

Collect keys, secure doors and windows, retrieve mail, deal with landscaping, and pay attention to anything that could make the property appear obviously vacant. You may also need to address utilities, alarm systems, vehicles, pets, and other practical matters.

Chat with neighbors and ensure they know how to reach you if something looks amiss at the property.

5. Identify the Assets and the Bills

Begin putting together a list of what your loved one owned. That might include real estate, bank accounts, investments, vehicles, business interests, personal property, and other assets. At the same time, start identifying recurring expenses and obligations such as the mortgage, property taxes, insurance, utilities, HOA dues, credit cards, and other bills. Often, these bills need to be continued to be paid. You may discover that some assets were held in the Trust while others were not. If that happens, consult an attorney before assuming how those assets should be handled. Personal property may need to be inventoried, distributed among beneficiaries, sold, donated, or otherwise handled according to the estate plan and advice from the appropriate professionals...so while you may be tempted to start giving things away, don't do that without consulting an attorney.

6. Get a Date-of-Death Appraisal for Real Estate

This is one of the steps people sometimes overlook. If your loved one owned a home, rental property, or other real estate, talk with your CPA and attorney about obtaining a date-of-death appraisal. This is literally a value of the property at the date of the owner's death, which could be months or years before the property actually gets sold. The property's value as of the date the owner passed away can be important for tax and accounting purposes. This is different than “What could the house sell for today?” Even if you don't intend to sell the property immediately, establishing its value at the appropriate date will be important later.

7. Talk With the Right Professionals

You don't have to figure all of this out by yourself. Depending on the estate, you may need an estate or probate attorney, CPA, financial advisor, appraiser, and real estate professional experienced with probate and trust sales. Each has a different role. As a real estate broker, for example, I can help evaluate the real estate, discuss its current market value and condition, determine what preparation may make sense before selling, and coordinate many of the practical details involved in getting a property ready for market. But I don't provide legal or tax advice, which is why having the right team can be so important.

8. Decide What Needs to Happen With the Home

Eventually, there is usually a decision to make: Will the property be kept, transferred to a beneficiary, or sold? I've worked with many estate properties over the years, and the right preparation can vary tremendously. One home may benefit from paint, flooring, landscaping, and staging. Another may make more sense to sell largely in its current condition. Before spending significant estate funds, it can be helpful to have an experienced real estate professional look at the property and help determine which improvements are likely to matter to buyers, and which probably aren't worth the expense.

There may also be a lot of logistical work involved: removing personal belongings, hauling away unwanted items, coordinating an estate sale, cleaning, landscaping, inspections, repairs, contractors, staging, and ultimately preparing the home for sale. A good real estate agent experienced with estates should be able to help coordinate much of that process.

9. Establish the Appropriate Estate or Trust Bank Account

Depending on how the estate is structured, you may need to obtain a taxpayer identification number and establish a separate bank account for the Trust or estate.

That account may be used to pay expenses, receive income, and ultimately receive proceeds from the sale of estate assets such as real estate. Your attorney and CPA can advise you on exactly what is required for your situation.

10. Keep Good Records

Finally, document everything. Keep records of expenses, repairs, professional fees, distributions, property-related costs, deposits, and other transactions involving the estate.

When you're juggling dozens of responsibilities, it can be tempting to tell yourself, “I'll organize all of this later.” Later has a way of becoming much more complicated. Good recordkeeping from the beginning can make life much easier for you, your attorney, your CPA, and ultimately the beneficiaries.

You Don't Have to Do Everything at Once

Settling someone's affairs can feel overwhelming because there may be legal, financial, emotional, and practical decisions happening simultaneously. Start with the things that are most urgent: find the estate documents, identify who has authority to act, obtain death certificates, protect and insure the real estate, and begin assembling the appropriate professional team. Then you can work through the remaining pieces one at a time.

During my 20+ years as a Sacramento-area REALTOR®, I've helped numerous clients sell homes and other real estate through Trusts and probate estates. I also served as the personal representative and administrator of my own mother's estate, so I've experienced this process from the other side as well. If you've inherited property in Greater Sacramento, or you're a successor trustee, executor, or probate administrator trying to figure out what to do with a home, I'm happy to help you understand the real estate side of the process and connect you with attorneys, CPAs, appraisers, estate liquidators, contractors, junk-hauling services, landscapers, inspectors, stagers, and other professionals when needed.

Important: This article is intended to provide general information about some of the practical steps that may arise after a loved one passes away. It is not legal, tax, or financial advice. Every estate is different, so consult qualified legal and tax professionals regarding your particular circumstances.